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Hershey's Trust Rejects Mondelez's Buyout Bid. What Investors Need to Know.
HSYHershey(HSY) The Motley Fool·2024-12-24 01:18

Group 1: Mondelez's Actions - Mondelez announced a new share buyback program, authorizing up to 9billioninpurchasesofitscommonstock,startingJanuary1andlastinguntilDecember31,2027,whichislargerthantheprevious9 billion in purchases of its common stock, starting January 1 and lasting until December 31, 2027, which is larger than the previous 6 billion program [1] - The company declared a quarterly dividend of 0.47pershare,matchingitspredecessor[1]−Mondelez′sstrategyindicatesafocusonsmalleracquisitionsratherthanpursuinglargetargetslikeHershey,asitaimstoallocatecapitaltowardsbolt−onassets[14]Group2:Hershey′sMarketPosition−Hershey′smarketcapitalizationstandsatnearly0.47 per share, matching its predecessor [1] - Mondelez's strategy indicates a focus on smaller acquisitions rather than pursuing large targets like Hershey, as it aims to allocate capital towards bolt-on assets [14] Group 2: Hershey's Market Position - Hershey's market capitalization stands at nearly 34.5 billion, reflecting its strong brand recognition among U.S. consumers despite recent challenges [3] - The company faced a 1% year-over-year sales decline to just under 3billion,withnetincomedroppingover123 billion, with net income dropping over 12% to 446 million in its most recent quarter [18] - Hershey's controlling shareholder, the Hershey Trust, rejected a recent acquisition bid, indicating a reluctance to sell the company [9][11] Group 3: Industry Challenges - The chocolate and confectionery industry is facing challenges due to high cocoa prices and a trend towards healthier eating among consumers [17] - The popularity of GLP-1 weight loss drugs is also impacting demand for sweet treats, contributing to Hershey's sales slump [18]